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SCIENCE & TECHNOLOGY TRENDS QUARTERLY REVIEW No.15 / April 2005 4

Trends in Technology and Industry, and Proposals for Future Directions — Towards the Fusion of Seeds and Needs — KIMIO TATSUNO Information and Research Unit

has been increasing since immediately after the 1 Introduction collapse of the optical communication bubble. Led by peer-to-peer sending and receiving of Optical fiber communication technology motion pictures, the conversion of the work enables ultrahigh-speed, high-capacity, of business and national and local government long-distance transmission. Because there is no is gradually spreading through e-commerce, alternative technology, it is indispensable basic e-government, e-education, e-medicine, and so infrastructure supporting society’s information on. These add up to the working of synergies that and communication functions. The spread and are peculiar to the . improved performance of photonic infrastructure Therefore, at some point in the near future therefore has a major influence on a country’s we may awake to find that traffic is congested overall social life. For example, mobile at various points in society. The reliability and using utilize wireless communication to safety of communication may be damaged, and reach nearby stations, but the stations declining quality of service (QoS) may become utilize photonic networks among themselves, a major social issue. In other words, bottlenecks and optical-fiber cables on the ocean floor enable may occur in the photonic networks that form real-time communication with people all over the backbone of communications infrastructure. the globe. In addition, while the asymmetrical For that reason, we must not relax research and digital subscriber lines (ADSL) now widely used development efforts directed towards future for the Internet use metal wires, station-to-station photonic technology. transmission utilizes photonic networks, Based on the current awareness and future connecting the world’s personal computers. The vision described above, this article discusses scale of the world market for the photonic device questions such as the following. (1) What is industry that utilizes this technology as its core the background of the optical communication is ¥10 trillion. If optical fibers are connected not recession, and why did it occur? (2) In relation only to backbones but also to ordinary homes as to the continuously increasing volume of exemplified by “fiber to the home” (FTTH) and traffic, what will the next bottleneck in to information devices, the scale of the photonic photonic technology be? (3) Is a structure device industry’s market can expand even in place for creative research into new further. communications services actively utilizing However, for the past several years the optical broadband infrastructure made possible by communication industry has been confronted photonic technology? In addition, the article with the collapse of the IT or dot-com bubble, offers proposals regarding the direction of and with the world in the throes of a recession R&D designed to fuse the seeds of optical led by North America, demand for backbone communication infrastructure with the needs in particular has cooled off and the market has that require it. stagnated. Meanwhile, traffic over Internet lines

50 51 SCIENCE & TECHNOLOGY TRENDS QUARTERLY REVIEW No.15 / April 2005

Figure 1 : Optical fiber transmission loss bands and optical fiber amplifier operation frequency

Figure 2 : Principles of optical communication 2 Optical fiber communication technology

2-1 Optical communication principles and wavelength division Within photonic technology there are modes such as the propagation of through space, but this article discusses optical fiber communications utilizing optical fibers of

glass materials with silicon oxide (SiO2) as the . For the sake of simplicity, the article will refer to this as “optical communication.” Figure 1 shows transmission loss characteristics of optical wavelengths on currently installed typical optical fibers[1]. The strength of that light is digitized as an electrical peak in the center is the absorption band created signal that modulates on/off. The modulated by the harmonics of the OH base of residual light are propagated in the optical fibers, moisture inside the fiber. Ordinarily, optical but absorption and in the optical communication utilizes the wavelength bands, fibers cause loss of data and . For called “windows,” that avoid the peak. The long-distance communications, therefore, wavelength used at first was 0.85µm to the left repeaters are placed every few tens of kilometers of the peak. That was because the materials for to transmit optical signals over long distances. laser of the time were GaAs-based. Later, On the receiving side, photodetectors and InP-based laser diodes were developed, and the electric amplifiers are in place, and the optical band from 1.3µm to 1.6µm, where transmission signal is converted into an electrical signal and loss is lowest, came into use. Furthermore, the original data are recovered. In conventional optical fibers are low cost at under ¥10 per single-wavelength mode, repeaters temporarily meter, they are long-lived and reliable, and their convert attenuated optical signals into electrical tensile strength is greater than that of steel. In signals, and reactivate a laser after electrical practice, such optical fibers (125µm diameter, amplification. In other words, each repeater must approximately 10µm core) are bundled by several perform photoelectric conversion and electrical hundred into optical fiber cables when installed. conversion. This conversion must be carried Figure 2(a) shows the basic structure of optical out for each wavelength channel, so utilizing communication utilizing optical fibers with wavelength division multiplexing with this characteristics like these. There is a method is difficult. light source on the data transmission end, and the In contrast, as shown in Figure 2(b),

50 51 SCIENCE & TECHNOLOGY TRENDS QUARTERLY REVIEW No.15 / April 2005 wavelength division multiplexing (WDM) passes by repeaters unnecessary. This is because these beams from multiple laser diodes for different optical amplifiers function like optically-pumped wavelengths through a coupler before inputting lasers, enabling them to amplify optical signals them into a single optical fiber. Therefore the in batches as light and on a relatively wide transmission capacity of a single optical fiber wavelength band. Furthermore, it is fortunate is the product of one wavelength channel’s that the operation frequencies of optical fiber transmission speed multiplied by multiple amplifiers, referred to as the S, C, and L bands, wavelengths. For example, if the interval between happen to be the optical fiber wavelength bands wavelength channels is 0.4nm, and the entire with the least loss, as can be seen in Figure 1. As wavelength used is 400nm, it can be multiplied depicted in Figure 3, the cable across the floor by 1,000 channels. If each wavelength channel of the Pacific Ocean has 180 repeaters equipped transmits 40Gbps, 40-Tbps ultrahigh-capacity with optical fiber amplifiers strung together optical communication becomes possible. If we about every 50 kilometers. explain this astonishing communications capacity in terms of digital versatile discs (DVDs), the 2-2 The structure of data stored in a two-hour movie on DVD is 4.7GB optical communication networks (about 40Gb), so the information stored in 1,000 As shown in Figure 4, the extremely high DVDs can be transmitted to a destination across performance optical communication method the Pacific in about one second. described above comprises a network Optical fiber amplifiers[1] such as erbium-doped constructed of a transmission system and fiber amplifiers (EDFAs) make this wavelength exchange system that ties it together. The multiplexing transmission possible. Using them transmission system can be roughly divided into renders photoelectric and electrical conversion three layers, the backbone system (10-40Gbps)

Figure 3 : Repeaters for the Transpacific Cable

Figure 4 : Structure of the optical communications network

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connecting cities and undersea networks, the economic competition. Ports, canals, railroads, urban system (1G-10Gbps) inside cities, and superhighways, waterworks and sewers, and access system (0.1-1Gbps) exemplified by “fiber so on, were all invested in as infrastructure to the home (FTTH).” that would empirically increase national These transmission channels are connected competitiveness. A corporate investment of $100 to each other by exchange nodes. The exchange billion would be enough to lay optical fibers to nodes are equipped with routers, which they use every home, office, factory, school, library, and to control the destinations of traffic. If we liken hospital.” exchange nodes to an expressway, they are the Financial support for such expectations for equivalent of interchanges. With the increase in photonic technology began in 1990 with part traffic, faster switching throughput and higher of the surplus US military budget created by capacity processing scale are needed. As I will the end of the Cold War. This ample budget explain below, in contrast to the transmission was channeled through the Defense Advanced network, for which capacity has been sufficiently Research Project Agency (DARPA) to many US prepared through wavelength division universities and companies, such as , multiplexing, the exchange node system may the past Mecca of photonic technology, and become the bottleneck for photonic networks in research and development grew active. The the future. US activity spread to Japan as well. At Japanese communications companies such as NTT and 3 The optical communication KDDI, communications device manufacturers industry and the collapse of like Fujitsu, NEC, and Hitachi, optical fiber the IT bubble manufacturers such as Furukawa Electric, Sumitomo Electric, and Fujikura, as well as at 3-1 The beginnings of photonic technology universities and national laboratories like NICT, Regarding the high-performance photonic the race to research and develop photonic technology described above, a 1991 speech technology grew heated. In Europe as well, it by Vice-president Al Gore[2] shows the great spread not only to public research institutes expectations the United States Government had like the UK’s British Telecom (BT), Germany’s for it as essential technology for Information Heinrich Hertz Institute (HHI), and Society infrastructure. “Now, the most Telecom, but also to the labs of companies important thing is to announce the creation of such as Germany’s Siemens, the Netherlands’ an information superhighway. This information Philips, France’s Alcatel, and the UK’s , and superhighway will be the greatest single factor concentrated investment in the installation of in raising the curtain on the . optical fibers moved forward. However, the United States’ current policy of basing this on a network of metal wires is 3-2 The WDM jump interfering with the dawn of the new age of The result, as can be seen in Figure 5, was optical fibers. This problem is nonexistent that the transmission capacity of optical not only in advanced countries like Japan and communication at a practical level took a sudden Germany, but also in developing countries and remarkable leap forwards. In the Chart, where metal networks are under the staircase-like line represents transmission construction. If the United States does not speed per wavelength, while the line above that break through this information bottleneck and represents transmission capacity per optical fiber retains the status quo, American technology will through wavelength multiplexing. The arrow be left behind that of other countries. In the indicates the so-called WDM jump, where the past, the quality of a country’s transportation transmission capacity of multiplex wavelengths infrastructure determined victory or defeat in alone exceeded that of single wavelengths. The economic competition. Countries with ports that practical application of this technology advanced could handle large ships were the winners in at a pace faster than that of Moore’s Law, the

52 53 SCIENCE & TECHNOLOGY TRENDS QUARTERLY REVIEW No.15 / April 2005 accepted timescale (doubling every two years; the broken line in Figure 5), for advances in 3-3 The optical communication market information and communications technology and Now we will look at the correlation between . LSI drives the laser diodes that are the rapid growth of wavelength multiplexing the light source for optical communication, and technology and participants at the annual the rate of LSI grows in accordance Optical Fiber Communication Conference and with Moore’s Law [1], wavelength division Exhibition (OFC) as depicted in Figure 6. The multiplexing exceeds it in principle. The amazing OFC is held in the United States every year and technological innovation of wavelength division is the world’s largest exhibition at which optical multiplexing sparked public investment by the communication businesses and technologies above-mentioned DARPA, and numerous venture are exhibited all at once. Annual changes in and investment companies gathered around the size of the optical communication can be it seeking business opportunities. At first, no seen in it. According to these data, participants one could have predicted that it would lead to increased rapidly to a peak in 2001. Clearly, this excessive investment in optical communication is because participants from major corporations that would cause a bubble effect. In addition, and venture capital companies rushed in seeking unrealistic expectations for the spread of the the above-mentioned business opportunities in Internet and the unbundling of communications wavelength division multiplexing. I also attended infrastructure through deregulation in the United for five consecutive years from 1997 through States also contributed to such investment. 2001. I gave an oral presentation each time, including the opportunity to deliver an invited

Figure 5 : The WDM jump (remarkable growth in transmission capacity through wavelength division multiplexing)

Figure 6 : OFC participants (Exhibition and Academic conference)

Source: Author’s compilation based on data from Optical Society of America (OSA)

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address before approximately 1,000 people, so I Figure 7 : The markets for optical communication and display devices personally witnessed that amazing expansion. A majority of the new participants were from venture corporations spun off from universities, public research institutes, and major corporations. Venture corporations from universities and public institutions in particular were protected by the Bayh-Dole Act of 1980. Traditionally, when universities carried out research funded by the US government, the government retained any patents. The law made it possible for universities and researchers to retain patents. This enabled universities to own and patent the results of government-funded research, opening the way to technology transfer between universities and corporations through licensing agreements. In addition, a 1996 revision to the

Telecommunications Act provided for unbundling. Source: Author’s compilation based on data from Invested grew heated as deregulation of Optoelectronic Industry and Technology Development Association the communications infrastructure enabled companies to lease competitors’ infrastructure to in only a few years. As a result, the current provide services. optical communication market is merely treading Since the peak in 2001, however, the number water. Competitive market economies can bring of companies exhibiting and the number of out great power when times are good, but participants in the academic conference have afterwards investors must always watch whether dropped sharply. This is clearly caused by the to keep investing and avoid bubbles created by rapid decline in the formerly numerous venture speculation without substance. Ironically, the enterprises. In other words, the communications optical communication industry took a major hit systems companies that are the venture firms’ from the WDM bubble that was created by the most important customers have been hit hard by revolutionary technical innovation of wavelength the collapse of the IT bubble and have had to stop division multiplexing. ordering from the venture companies. This has Naturally, the influence of the North destroyed the supply-and-demand that is the basis American optical communication recession of healthy economic activity, and the venture spread to Japan as well. At one time, Japanese firms that once sprouted like weeds are now corporations were thriving on orders for parts facing the dismal fates of merger and acquisition, and equipment from North American optical if not dissolution. communication companies. Figure 7 shows The cooled demand is the result overheated annual domestic production of photonic devices investment competition carried out without in Japan[4]. Display-related devices are shown for careful analysis of demand. At the time of the comparison. After declining following a peak in peak, it was reported that optical fibers were 2000, production immediately rebounded and his being laid at three times the speed of sound. grown steadily since then. In contrast, domestic It is said that globally 0.5 terameters of fiber production of photonic devices has not recovered have been installed, enough to circle the Earth since the 2000 peak, taking on the aspect of a 10,000 times. Ten percent of that is said to be bubble collapse. The project on mass production in China[3]. The small optical communication of transceiver modules for access-system optical infrastructure market that should have been communication[5 - 6] in which I was personally grown over 10 years instead became saturated involved was no exception. It began in 1996,

54 55 SCIENCE & TECHNOLOGY TRENDS QUARTERLY REVIEW No.15 / April 2005 and by 2000 we had a production line capable of risk management, electronic medicine, electronic completing several hundred thousand units per education, and “ubiquitous Internet.” For month, but just after we began trying to sell them example, looking at commercial transactions to customers, the project was canceled, to our between companies, over the past few years great disappointment. the percentage of electronic transactions has been increasing by 11 percent annually[8] in 4 Trends since the collapse of accordance with the e-Japan Plan. Of course, the bubble several tens of percentage points of transactions such as individual stock trading, airline and hotel 4-1 Traffic growth and trends in reservations, and individual bank payments are communication services already taking place over the Internet, becoming Will the optical communication market a cause of the increasing traffic. recover? To answer that question, I examined Conventionally, Internet connections were growth in Internet traffic and its causes. Figure limited to personal computers and mobile 8 shows traffic measurements taken at a traffic telephones, but in the near future digital measurement point in Tokyo’s Otemachi [7]. consumer electronics such as widescreen Ironically, since immediately after the collapse , video recorders, digital cameras, of the optical communication bubble (Figures 6 portable movie cameras, and personal data and 7) in 2001, traffic has been doubling every assistants (PDAs), as well as home appliances year. If it continues at this pace, future traffic such as refrigerators, ovens, and volume increases may put pressure on photonic washing machines will connect to the Internet networks, and traffic bottlenecks may occur, by . In addition, automobiles will connect causing declining Quality of Service (QoS) to by wireless. Furthermore, if IPv6 standardization become a serious social issue. advances and a society of ubiquitous Internet The wave of information technology that connections is realized, almost all goods will has a major impact on economic system and have IC tags attached. The amount of information industrial structure reform throughout the associated with each item will not be large, country is advancing in a number of fields, but the number of items will be enormous. It is including electronic government, electronic estimated that in 2010 there will be 15 billion trading, logistics management (IC tag systems), devices connected to the Internet[9], so traffic

Figure 8 : Traffic growth (doubling annually)

Source: Author’s compilation based on data from the Japan Internet Exchange (JPIX)[7]

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volume may further increase. illegal copying of digital music distributed by Data volume is particularly high for moving Internet services, which are ahead of video pictures. The spread of video telephones that services. Competitive markets for content have utilize broadband capabilities, or the Internet formed in the United States, where the business exchange of videos made at home or work model is to use each window, from theaters to are definitely expected to increase. Just as rentals to Internet distribution to pay TV to free digital music transmission services that send TV, as a window to maximize sales. Therefore ringtones to mobile telephones have become Japan must also quickly resolve the bottleneck to active recently, currently high-quality video Internet distribution created by copyright issues. services for consumers, such as video on demand In addition, in the future when each home (VOD) to replace DVD rental, as well as Internet will have a high-capacity hard disk drive (HDD) transmission of high-definition video and digital or a low-cost server bundled with a recordable cinema, are expected to spread. high-capacity optical disk, desire for Internet VOD was actively researched and developed in distribution will be stimulated even more. In the second half of the 1990s, and trials have been other words, the arrival of an era in which carried out in certain areas. At that time, though, people can use specialized terminals and Internet both user fees and the set-top boxes (STBs) used terminals to enable electronic program guides as receivers were expensive, and the service (EPGs) to automatically reserve recordings did not spread. However, if broadband fees fall and build collections of desired content is sufficiently from those prices, and if additional expected. Clearly, if Internet distribution and charges are less than those for a video shop, digital broadcast services fuse, and digital video video-on-demand may reappear on the market. travels back and forth all over the IP Internet, In fact, beginning next January, services[10-11] that the photonic networks that underlie the transmit new movies on DVD over the Internet communications infrastructure will be pressured. will open with fees equivalent to those of video stores. Although it is gradual, VOD services 4-2 New FTTH trends are beginning. They will begin with current The traffic described above currently moves DVD image quality, but Internet-distributed through communication lines such as the 72 digital cinema with high definition (HD) and million mobile telephone subscribers, 12.6 super high definition (SHD) is in sight. Digital million ADSL subscribers, 2.8 million cable cinema represents the digitization of the ancient TV subscribers, and now 1.75 million FTTH 35-millimeter film system that has been in use for households. Among them, the most notable 100 years. Standardization work led by NTT and recent development is high-speed FTTH. It may the University of Tokyo[12] in conjunction with be preparing broadband users for the Internet Hollywood is well underway. In addition, NHK distribution of video described in the previous and other networks all over the world section. Looking at the number of FTTH and have vast archives that are stored without ever ADSL subscribers as depicted in Figure 9 [14], seeing the light of day. although ADSL growth appears saturated, FTTH Protecting copyrights of stored data that is growth is steep. transmitted over the Internet in this way is This is because at 100 Mbps FTTH transmission not easy. Currently the Copyright Council is speed is faster than other types of broadband discussing the idea[13], and eventually a solution lines and that speed does not depend on is expected. In fact, a number of waves are transmission distance between stations and approaching. There is consumer demand for subscribers. Other reasons include high technical content that can be more conveniently and easily potential, with plans to expand soon to 1 Gbps. viewed over the Internet than any other way. Regarding user fees, price-cutting and service There are immediate business opportunities for competition are underway. In addition to NTT copyright holders and service providers to charge East and NTT West, Tokyo Electric Power Co. fees. More advanced technologies exist to prevent (TEPCO) is entering FTTH by utilizing the

56 57 SCIENCE & TECHNOLOGY TRENDS QUARTERLY REVIEW No.15 / April 2005 optical fiber network it uses to monitor electric FTTH subscribers in the world, so that trend is lines, and thanks to unbundling policy, vigorous capturing the attention of concerned parties all Yahoo BB is entering by renting NTT’s optical over the world[3, 16]. This situation can be seen fiber network[15]. Since the backbone market has as an excellent opportunity for Japan to display cooled, FTTH is drawing investment instead. In even greater leadership on international standards November 2004, NTT announced its policy to for FTTH. With its existing switch 30 million telephone customers, system (74 million households, a 67.7 percent about half the total, to FTTH by 2010. It is to penetration rate), the United States is advanced invest ¥5 trillion over the next six years. NTT in terms of triple-play service, video, audio, and has also announced plans to replace all landline data. However, the actual service speed of cable telephones with optical IP telephones. TV’s data speed of 30 Mbps slows when it is With this progress in broadband infrastructure, shared among 100-500 subscribers. In contrast, Japan is leading the world in FTTH as Japan’s FTTH speed of 100 Mbps to 1 Gbps is communication and fuse to create shared among 32 or 64 customers, so the ability new services as shown in Figure 10. The concern to provide service that is faster by a factor of 10 that Vice-president Gore voiced in the 1991 may prove superior. speech[2] quoted in section 3-1 above, that Japan In South Korea[18,19], Taiwan, China, Singapore, and developing countries will lead the United and some countries in Southeast Asia, conditions States on the information superhighway, may are similar to those in Japan in that cable TV be becoming a reality. Japan is number one in is not as widespread as in North America and

Figure 9 : Number of FTTH and ADSL subscribers

Source: Author’s compilation based on Ministry of Internal Affairs and Communications data[14]

Figure 10 : The fusion of communication and broadcasting: applications for FTTH

Source: Author’s compilation based on Opticast materials[17]

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Figure 11 : Router growth (doubling every one and a half years) and router processing speed improvement in relation to traffic growth

Europe. Those countries are therefore tending although the market for transmission-system towards implementing IP Internet broadband transceiver modules has rebounded from last services through FTTH or low-cost fiber to the year’s low and shows signs of a mild recovery this building (FTTB) + DSL for housing complexes year, no sudden leaps forward can be expected or through hybrid fiber coaxial (HFC, a mix from the market. The prevailing view is that of optical and cable TV). Japan is likely to lead demand will eventually recover and that only the East Asia region in setting standards for companies that patiently take on the challenge of access systems such as FTTH. To do so, tie-ups mass production of 40 Gbps transceiver modules with China and its gigantic 1.3 billion person and the full-fledged technical development of 160 market are vital. Indeed, an IPv6 project led by Gbps modules will be able to make it through the the governments of China and Japan in which difficult period until recovery. Japan provides IPv6 routers for insertion into We must also look at routers, which affect the China’s education and science networks is processing performance of the exchange nodes currently underway. Hitachi, Fujitsu, and NEC that comprise the other basic element of photonic IPv6 routers have been placed in nodes in networks. As shown in Figure 11, the processing universities in Beijing, Shanghai, and Guangzhou. speed of electronic routers is doubling every one Applied research on connections to Japan and a half years. This speed may not be sufficient and IPv6 networks is also developing[20]. Such to keep up with traffic, which is doubling every achievements should be continuously utilized year (see Figure 8). This is because, as explained to promote standardization in access systems. above, wavelength division multiplexing that The above section has described trends in access utilizes the properties of light is able to exceed systems. Moore’s Law, while the switching speed of electronic routers is decided by the performance 4-3 Router bottleneck of LSI circuits and has not been able to surpass Looking at backbone systems, we find Moore’s Law. situations such as the following. As described in As denoted in Figure 11, recently in this field section 2-2, photonic networks can be divided Cisco Systems announced routers with the into transmission systems and exchange node shocking system throughput of 92 Tbps[21]. The systems. The capacity of transmission systems has equipment links several electronic routers with been radically expanded through the wavelength an optical that uses laser diodes division multiplexing described above. Therefore, and optical fibers. Cisco succeeded in technical

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Table 1 : Technical issues in the optical communications field

Backbone systems Access systems QoS, security, encrypted communication, multicasting, e-commerce, Communications services e-government, triple play, VOD, digital consumer electronics, ubiquitous, etc. International standards GMPLS FTTH (FSAN) Optical routing Electronic routers Exchange nodes Hybrids Low cost 0.1-1 Pbps Energy saving 160 Gbps and beyond Low cost Transmission channels 100-1,000 waves Transceiver modules development that leaped past previous trends. data as unchanged optical signals are being The system is a hybrid that adds the advantages sought. Table 1 is a summary of the future R&D of light to conventional electronic routers, issues just described. Recently, research and and it may start a trend. As for optical routers, development in quantum communication and ultrahigh speed parallel processing utilizing quantum cryptography communication[23], which two-dimensional wave fronts (e.g., Fourier are intended to surpass wavelength division transformation by lenses) is possible, raising multiplexing in optical communication capacity expectations for the technology. and security, have become active as well, but Currently, electric power, including air space does not permit me to address them in this conditioning, consumed by photonic networks article. and other information communication devices is only about 5 percent of the whole. It is feared, 5 Future directions however, that the spread of equipment in response to traffic growth could 5-1 Overseas R&D trends lead to power shortages. Therefore it is extremely Although the United States, like Japan, is in an important to develop systems that consume little optical communication recession, the National power. In that sense, technical development to Science Foundation (NSF) and DARPA are funding take advantage of the low power consumption R&D test beds using photonic technology. Joint of light is also important. With the advent of government-private sector public projects to optical fiber amplifiers, photoelectric/electrical create new services utilizing high speed 10-20 transformation in repeaters in transmission Gbps optical fibers are being strongly pushed. systems became unnecessary. In the same Major projects[24] include the “vBNS+” project way, challenging research to create all-optical on IPv6, multicasting, and digital libraries, networks in which light travels as light from the “Abilene” project on QoS verification and to receiver by replacing electronic security, the “TeraGrid” project on applying routers in exchange nodes with optical routers is photonic technology to grid computing, and making progress. the “StarLight” project on Internet exchange Generalized multiprotocol label switching (IX) points and optical switching and routing (GMPLS), which requires advanced photonic research. Emphasis is placed on projects involving technology prowess, is emerging as the next services and applications using high-speed protocol for high-speed photonic networks. networks including optical communication. GMPLS carries out processing by using optical It is worthy of particular attention that a signal wavelength as a label to decide routing, balance is being kept with projects on optical preparing a specially controlled IP channel communication devices and equipment. In to route data as an optical signal[22]. Because addition, numerous corporations and universities transforming an optical signal into an electrical are actively involved in the projects, and cycles signal when performing routing causes a loss to transfer technology to the private sector of speed and consumes power, ways to route through industry-academia tie-ups are in place.

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Table 2 : With software at the top and commodities at the bottom

Optical disks Personal computers Communications networks Motion picture companies Communications protocols Software, systems (content) 4 Windows (Microsoft Corp.) (Hollywood) Services DVD disks Key devices Decoders CPUs (Intel) Routers (Cisco) MPEG standards Hardware Players PCs Transceivers, servers Laser diodes, Optical pickups, Commodities Memory (HDD, DRAM) modulators, photodetectors, memory, circuits, mechanisms optical fibers

In Canada, “CA*net4,” the world’s first national such as optical disks and personal computers optical network has been deployed, and research can be illustrated with the brains at the top in in broadband service like e-business, e-content, the systems and software where knowledge is e-health, and e-education is being pushed. It is most concentrated, the heart in key devices, also connected to other R&D networks in Europe and commodities as the extremities [26 -27]. In and the United States. this diagram, the higher one goes , the more In Europe, from the perspective of emphasizing knowledge is concentrated and business value the public nature of information communications is added. Of course, leadership on international infrastructure, the EU and national governments standards is also closely involved. How well are showing strong leadership and operating Japan’s technologies and businesses can break projects to create new services. The projects into the top of this structure can be seen as include “GEANT” on QoS and multicasting an index of the success or failure of Japan’s IT research. “6NET” on IPv6, and “SURFnet6” on industry until the present and into the future. interconnectivity, electronic corporations, and e-business. 5-2 Support for research investment by In Asia, projects such as China’s “CERNET” Japanese corporations on IPv6 and distance education, South Korea’s As described above, conditions surrounding “KOREN” and “KREONet2” on QoS, multicasting, photonic technology and industry have begun to IPv6, and MPLS, Taiwan’s “TANet2,” and change now that a few years have passed since Singapore’s “SingAREN” are being promoted. All the bubble collapsed. Indeed, the market seems of those test beds are linked to other test beds to have hit bottom and to be showing signs of in the United States, and R&D on proving new recovery (see Figure 6). We can hypothesize services through international tie-ups is being that because shortly after the bubble’s collapse advanced[24]. Internet traffic began increasing even more than To begin with a long-term, panoramic view, it had been (see Figure 8), investment is gradually underlying the economic success of the United reviving in light of predictions of the arrival of a States in the 1990s was a system driven by the true IT Society. revival of weakening hardware industries through Japanese corporations, however, were hit hard the introduction of information technology along by the semiconductor recession that followed the with the software industries that were already bursting of the real estate bubble in the 1990s as leading. The economy rode those two vehicles well as the collapse of the IT bubble. Negative to sustained economic growth [25]. Naturally investment factors followed in succession, and therefore, in the field of optical communication as the ability of corporations to invest in research well, along with hardware investment, the United is now weak. They therefore lack the ability to States will not stop investing in the software and sustain very risky research themes, and a shift services that are its specialties. of resources away from optical communication As shown in Table 2, an overview of the fields to other research is also taking place, industrial structure of information technologies leaving the future uncertain.

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If corporations are unable to perform research on themes for which the research phase carries 5-3 The status of Japan’s public projects great risk, the orientation of researchers towards In regards to the situations described above, leading-edge research issues that forms the most Japan is engaged in the public projects shown important element of research and development in Figure 12. The chart summarizes basic will be weakened, and opportunities for research that will be the foundation of future groundbreaking discoveries may be lost. photonic technology, applications in devices and Furthermore, if researchers do not have a grasp equipment, and research on systems and services. of R&D issues involving the most-advanced However, a tendency for the themes of this technologies, the vitality of corporate R&D, research and development to be biased towards which has had the greatest impact, will be research in devices and equipment, which has lost. When government, academics, or foreign been Japan’s specialty, is visible. It is as if the researchers announce technical innovations, projects are designed to supply commodities to corporations will no longer have the ability to demand in the IT services and businesses that are tackle them at the practical application stage. progressing in the United States. Moreover, most Moreover, a danger of having to accept miserable of them began at the height of the IT bubble, and defeat in competition not only with advanced they seem as if they may end next fiscal year in countries but also with developing ones will the wake of the collapsed bubble. arise. Of course, Japan also has a world-class test It is a time like this when public investment bed for research and development on IT services in research and development is vital. Continued utilizing high-speed optical fiber communication support from public investment is required if technology: Japan Gigabit Network (JGN). It Japan is to avoid losing its lead in the optical was carried out from 1999 through 2003, with communication fields in which it has maintained much success. It is being followed by JGN II, its competitiveness. which is to be operated by NICT from fiscal 2004 through 2008. JGN II is a joint R&D system on a communication network with transmission

Figure 12 : Summary of major Japanese projects and future directions

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speeds of 10-20 Gbps. Its purpose is to develop the economic phenomenon, snuffing out research Japan’s own communications services, security and development when the flame is burning low systems, and so. In addition, the National Institute is not good policy. It is therefore necessary to of Informatics operates the Super SINET network. remind ourselves that optical communication by However, most participants in these projects are nature is public infrastructure and to continue universities and public research institutes, and investing public funds in it. corporate participation is rather lukewarm. Investment should not be made in the If this continues, Japan will never be more traditional way of simply prioritizing seed than a parts store. The situation is similar to research themes in commodities supply. Instead, Microsoft’s overwhelming power in personal R&D to create demand should be set up through computers and Hollywood’s lead in providing test beds such as JGN II and Super SINET to content for optical disks, as shown in Table create new communication services, and that 2. American companies’ commodity strategy should be the vehicle driving research. Using for Asia appears to be operating in the field of that strength, Japan demonstrate leadership in optical communication as well. In other words, worldwide technology and business, beginning business focus and R&D on the communication with international standardization activities[29]. protocols that will form the basis for international Regarding access systems, Japan’s FTTH standardization, on services, and on applications subscribers lead the world, having exceeded 1.75 remains centered on the United States, which million. This is an opportunity for Japan to have takes leadership on international standards. a stronger voice in initiatives for international Therefore, no matter how much Japan touts the standards. For example, The United States is technical prowess of its parts and equipment, if it taking the lead in the triple-play service of is lacking in the software and service applications video, audio, and data with its existing cable needed to operate them as systems, Japanese television system. In Japan, on the other hand, companies will lose out to European and North high-speed FTTH, which has faster data speeds American firms in the competition for orders. than cable TV, is more widespread and may lead to advantages through the creation of superior 6 Conclusion communication services. In addition, South Korea, Taiwan, China, Singapore, and some other Based on the above awareness of the Southeast Asian countries are similar to Japan situation and view of the future, I will offer in that cable television is not as widespread in some proposals for the future direction of as it is in Europe and North America. Therefore research and development in the field of optical it is very likely that Japan could cooperate with communication as a whole. other countries in East Asia to take the lead The optical communication industry, which on standardization of FTTH and other access provides the basis for IT infrastructure, was systems. In particular, Japan should build on the hit hard by the bursting of the optical bubble. success of the joint government-led project on However, looking at the history of technological IPv6 with China to continue cooperation with innovation in areas such as railways, that country. broadcasting, and automobiles, in each of them In addition, copyright issues, which are bubble effects have formed and oversupply one hindrance to developing the market for destroyed the balance with demand leading to the Internet distribution of content, should an industry recession. Whenever society clearly be resolved quickly. This would stimulate the needed that technical infrastructure, however, creative ambitions of content creators and vitalize the technology gradually permeated society after the content market. The uniqueness of Japanese the bubble collapse and became indispensable animation in particular is recognized worldwide, infrastructure for living in society[28]. If we look and the spread of Internet distribution would seriously at the recent rapid increase in traffic, further vitalize such creative activities. and take the optical bubble as another example of Regarding backbone systems, Japan should

62 63 SCIENCE & TECHNOLOGY TRENDS QUARTERLY REVIEW No.15 / April 2005 demonstrate leadership on GMPLS, the Development Association, ed. “Report on that is advancing as optical technology roadmap” (2004) the next-generation international standard in [5] K. Tatsuno, et al, IEEE, J. of Lightwave exchange nodes, where future bottlenecks Technology, Vol. 17, pp.1211-1216, July 1999 are anticipated. The technology of Japan’s [6] K. Tatsuno, et al., IEEE, J. of Lightwave world-leading parts and equipment, which have Technology, Vol. 21, No. 4, pp.1066-1070, been boosted by Japan’s technical prowess, will 2003 be a formidable argument. [7] http://www.jpix.co.jp For those reasons as well, the various device [8] http://www.ecom.jp development projects under the jurisdiction [9] http://www.storm.com of different ministries should be periodically [10] http://www.artisthouse.co.jp/ checked from the perspective of JGN II as a [11] http://www.pod.tv/contents/help/gaiyou.ht test bed for the creation of new services, and ml the direction of new projects should be clearly [12] T. Aoyama; Technical Digest, Mo 1.1.2, ECOC announced. Concretely, the leader of each ’04 (Stockholm) project should form a comprehensive committee [13] http://www.mext.go.jp/b_menu/shingi/bun spanning all their projects. There they could ka/gijiroku/013/04110401.htm bring their results, exchange technologies, and [14] http://www.soumu.go.jp/s-news/2004/0409 seek future directions. They could integrate 30_2.html related technologies, as well as actively bringing [15] http://bbpromo.yahoo.co.jp/promotion/hika together people from private, public, and ri/index.html academic research institutions more often. [16] Y. Maeda; Technical Digest, Mo 4.1.1, ECOC ’04 (Stockholm) Acknowledgements [17] Masao Nito: “Opticast characteristics and I would like to express my thanks to the business development”, RBB TODAY/SSK following people for helping me with this article Special Joint Seminar (2004) by providing valuable opinions and information: [18] Y-K Lee: Technical Digest (CD-ROM), Professor Kenichi Sato of Nagoya University Plenary Talk, OFC ’04 (Los Angeles) (formerly of NTT), Dr. Yuichi Matsushima of [19] J. Hongbeom: Technical Digest, Mo 3.1.3, NICT, Dr. Kenshin Taguchi of the Optoelectronic ECOC ’04 (Stockholm) Industry and Technology Development [20] Masahiro Ojima: “China watching,” Association, Dr. Naoki Chinone of Japan OpNext, Optronics, No. 258, 6, 2003 Mr. Shinji Sakano of Hitachi Communication [21] http://www.cisco.com/en/US/products/ps57 Technologies, Dr. Masahiro Ojima of Hitachi, Mr. 63/ Shinji Tsuji of Hitachi, and Dr. Masahiro Aoki of [22] Kenichi Sato and Tadashi Koga: “Wide Hitachi. area technology: photonic networks”, Institute of Electronics, References Information and Communication Engineers [1] Shimada, Shibata, and Toba: “Photonic (2003) technology in the broadband era”, [23] http://www.ieice.org/jpn/event/program Shingijutsu Communications Co. (2004) /2004S/html/outline/floor/k_202.html, [2] Al Gore: “Infrastructure for the global http://www.magiQtech.com village,” Scientific American, Sept. p.108 [24] http://www.soumu.go.jp/s-news/2003/030 (1991). Yamashita, Kawase, and Ota: Hikari 725_4.html, Ministry of Internal Affairs and access houshiki (“Optical access methods”), Communication: “Report on the meeting to Ohmsha (1993) study the proper fashion of next-generation [3] H. Kogelnik; Technical Digest, Mo 1.1.1, R&D networks for the ubiquitous network ECOC ’04 (Stockholm) age”, (Tadao Saito, Chair) [4] Optoelectronic Industry and Technology [25] Motoshige Ito: “Digital economy”, Nihon

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Keizai Shimbunsha (2001) No. 13 “Recent Trends in Semiconductor [26] Kimio Tatsuno: Science and Technology Microfabrication Equipment Technology Trends - Quarterly Review , July 2004, No. 12 — Proposals for Industry-Academy “Latest Trends in the Optical Disk Industry Collaboration on Research and Development —The Superiority of Japanese Companies in Japan —” and a New China-U.S. Joint Effort for [28] Koichiro Hayashi and Nobuo Ikeda, eds.: Standardization—” “Designing systems for the broadband era”, [27] Kimio Tatsuno: Science and Technology Toyo Keizai (2002) Trends —Quarterly Reveiw, October 2004, [29] http://www.yamanaka.ics.keio.ac.jp

(Original Japanese version: published in December 2004)

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